Key Performance Indicators to Measure Delivery Efficiency
Efficient delivery of goods and services are the concerns of any businesses to ensure good profits. They need KPIs to measure delivery efficiency of their systems.
E-commerce and improved transport systems mean greater volumes of transactions are completed over shorter period of times. Business concerns are increasingly focused on satisfying a growing number of customers who demand that goods and services purchased are delivered to them on time and in good condition. Whatever their products, it is evident that to measure delivery efficiency, companies need to establish relevant criteria from which to base their assessments of the effectiveness of their delivery systems.
Business concerns utilize key performance indicators (KPIs) to measure their efficiency in terms of attaining general long-term goals and attaining specific immediate targets, such as routinely delivering goods and services to customers on time. Key performance indicators are expected outputs that are based on specific targets. To illustrate, a business might target reduction of delivery time of certain goods from ten days to five days within a month. This target, of course, is not plucked out of thin air. This target may be the result of customers’ complaints or the need of the company to speed up delivery to cut on cost, or even to catch up with increased demands. To measure efficiency, all the company has to do is look at actual outputs after the one-month period. Has the delivery system of the company attained its target?
Key performance indicators provide more than just the general picture, although it is a definite advantage for managers to be able to keep track of how well the delivery system is doing, at just a single glance. Delivery systems are composed of separate processes. Warehousing – equipment, space and layout, packaging and means of delivery, the availability of vehicles, delivery procedures, the number, and level of skills of employees involved are factors that can affect the effectiveness of delivery systems.
By simply looking at overall assessment figures, managers can say whether the system is working or not. When the figures indicate that targets are being met, then the system is probably performing well. But when assessment figures are off-target, then a deeper assessment is required. Bottlenecks in certain parts of system must be identified and corrective measures instituted.
Self-assessments are often tinged with bias. Not a very unusual occurrence in business concerns. After all, managers are being paid for performance. The better the assessment figures are, the better the manager will look to superiors. Some companies resort to contracting external assessors to assess, or to confirming in-house assessments.
Another way of assessing delivery efficiency is through research. Many companies field surveys, via the Internet and other means, asking customers to rate the effectiveness of their delivery services, either in conjunction with in-house ratings or, for companies that cannot afford internal systems audit, as the primary means of assessment.
There are many methods that companies can utilize to measure delivery efficiency of their systems. Key performance indicators are probably the most valuable of these measures, as they can be formulated to cover all aspects of the delivery system. However, the effectiveness of a particular delivery system is heavily dependent on how realistic and achievable the KPIs themselves are and how well they serve the purpose of satisfying customers. This means that a good measure starts with knowing issues involved in the delivery system and the internal capacity of the company.
